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Credit/Debt

What To Do If You Have A Bad Credit History

A bad credit history can be greatly unsettling and it’s something that you might only find out when you’re eventually refused a loan or mortgage that you desperately need. Many people feel helpless and confused when they realise that their credit history is less than ideal and they’re categorised as being unreliable or untrustworthy. As it’s not something that you’re necessarily taught at school, knowledge on the world of credit often comes from trial and error or learning from the lessons of others. If you have a bad credit history or think you might, here are four simple things that you can do to help yourself out of it.

1.      Find out the Cause

There are many things that can cause blemishes on your credit history and some of them you might not even know about. Bad financial behaviour like failing to meet payments on time or having legal action taken against you because you have breached a contract can leave serious marks on your record. The less obvious problems actually come from not borrowing at all. This means that lenders cannot asses your reliability because your credit record is very short or doesn’t exist at all. Similarly if you only borrow small amounts for a short time you can have a worse credit history than those who have taken out loans of large sums for longer. This is because, ultimately, loan companies want to make money so if you can show that you can afford to pay interest on top of your repayments then you are more attractive to them. If you find out that your credit record is bad, then it’s important to first identify what may have caused it so that you can take the right steps forward.

2.      Seek Advice to Improve

Next you should seek advice from money advice agencies or from friends or family you know that manage their money well or are in the financial sector. Beware of credit companies who constantly advertise that they can ‘solve all of your credit problems’ and ‘erase bad credit’ as many of them are likely to be scams. The fact is that there are no quick fixes when it comes to improving your credit rating. It takes time, patience and conscious effort with a disciplined budget or debt plan.

3.      Make Some Changes

When you have a plan, it’s time to actually implement some changes into your lifestyle and money management habits. There are many ways you can do this depending on what problems you have. One easy way to help payments get transferred on time is by setting up payment reminders on your bills or signing up for direct debit, but make sure you monitor that you have enough in your account first so that you don’t get charged with nasty overheads.

4.      Research Your Options

If you are refused a loan or insurance, don’t be afraid to ask for a report on why the company has made this choice. You are entitled to a report within 60 days of receiving the notice so be sure to do some research on your record. Some companies offer special deals for those with poor credit history such as guarantor loans so don’t worry as there are still options available to you. Credit report companies can also provide you with a free credit summary that will help you to spot inaccuracies in your rating.

Navigating the money minefield is tricky business especially if you’re on a tight budget or have been in troublesome situations in the past. But you don’t have to let it hold you back forever and with these simple tips you can move forward into a better financial future.

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Be the first to comment - What do you think?  Posted by Cash Flow Mantra - April 16, 2014 at 8:00 am

Categories: Credit/Debt   Tags:

Act in Haste, Repent at Leisure: The Spiral of Debt

It is very easy to get yourself into debt.  Everywhere you look; companies are promoting credit cards of all colours, shapes and sizes.  They tell you all about how good they are but do nothing about reminding you that they are going to cost you money.  And a lot of it.  It should be like smoking.  Every credit card should carry a large warning on the front of it ‘CAN DAMAGE YOUR WEALTH’.  Unless you are very good at avoiding these marketing techniques, then you likely have at least one credit card in your wallet.  And it doesn’t stop there. It became fashionable to get a new credit card with zero interest on it, and then when your interest free period expired, transfer it to another card.  Great idea you think!  No!  In reality what happens is you now have two credit cards in your wallet and it doesn’t take long for you to realise this and start using both of them. Disaster.

It gets to all of us.  If we then for some reason find ourselves with reduced income and unable to manage the repayments, we can start to lose control and fall into the ever increasing spiral of debt.  If you have found yourself in this predicament, and maybe found help via one of the debt-help charities, you know what it is like.  You have had your fingers well and truly burned.  But if all of your credit cards have been cut up, your cheque book shredded and your overdraft sent off to never-never land, what do you do when you have a temporary cash shortage?

No credit card for you.  In fact no more credit.  You have crossed the point of no-return and have to spend the next 10 years or so of your life paying back all that you owe.  So what if you have a cash dilemma?  Wonga offer an alternative to a payday loan.  They can help you, even if your credit is poor as they do not carry out traditional credit checks. Of course they will look at your cash liquidity and your earnings etc., but as you are limited to borrowing less than £400 for no more than 28 days, you will likely find that you will be accepted.  You will not be adding to your debts as you have to pay back the amount in full on a pre-agreed date.  The company will then take the sum due out of your nominated bank account without you having to raise a finger.  So, unless there are no funds in your account, your debt will be cleared in full.  No putting off until tomorrow what you can pay back today.  It’s a simple and straightforward way of coping when funds are short.  The great thing is, even if you are tempted to do so, you cannot put off the payback time.  It’s all about being responsible for your actions and accepting the fact that money is hard to come by.

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Be the first to comment - What do you think?  Posted by Cash Flow Mantra - September 8, 2013 at 8:22 am

Categories: Credit/Debt   Tags: , , , , ,

I am Getting a Financial Windfall

Recently, I found out that I will be getting a financial windfall.  Apparently several years ago (as in almost 20), there was a mistake with social security withholding during graduate school.  There ended up being audits and court cases, etc.  I simply provided some information that confirmed I was indeed a student at the time and gave the auditor permission to handle the rest.  I think the IRS got involved.  This all started several years ago.

Well, I got notice that I would be getting a check toward the end of this month.  Assuming that I actually see it, the amount is not all that small.  The money was actually put in escrow in an interest bearing account and actually doubled during the time that this has been going on.

Plans for the Money

Needless to say, the money will come at a good time.  I am working on paying off debt and feel that I am in a good frame of mind to be able to accept this money and not do anything stupid with it.  I plan on using the funds (since they weren’t expected) to pay off one of my credit cards and to pay the property taxes on the commercial building that will be coming due in May.

This will help me keep on track with my goal to eliminate consumer debt in another 34 months and provide some extra cushion so I don’t have to scramble for the tax money.  The timing couldn’t be better.

It is about time for some good news.

 

Carnivals

It has been forever since I linked to the carnivals that have featured my blogs so here goes:

Carnival of Retirement #60 - PT
Carnival of Financial Camaraderie #71 - GPM, CFM, PT
Finance Carnival for Young Adults   - GPM
Carnival of Financial Camaraderie #72 - PT
Lifestyle Carnival - PT
Carnival of Money Pros - GPM, PT
Carnival of Retirement #63 - PT
Carnival of Retirement #64 - GPM
I have been incredibly busy at work during the week and going to gymnastics meets on the weekends with state and regionals.  Finally, though, I should now have some more free time.  I need to help get the basement cleaned.  Ugh!
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12 comments - What do you think?  Posted by Cash Flow Mantra - April 10, 2013 at 8:35 am

Categories: Credit/Debt, Spending   Tags: , , ,

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